Your valid home address is used to determine which NY State Senator Represents you.

Apt/Suite/Floor (Optional)

City *

State *

Postal Code *

Home address is used to determine the senate district in which you reside. Your support or opposition to this bill is then shared immediately with the senator who represents you.

Optional services from the NY State Senate:

Send me alerts for this bill. I can unsubscribe at any time. Learn more.

Create an account. An account allows you to officially support or oppose key legislation, sign petitions with a single click, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.

Include a custom message for your Senator? (Optional)

Enter a message to your senator. Many New Yorkers use this to share the reasoning behind their support or opposition to the bill. Others might share a personal anecdote about how the bill would affect them or people they care about.

S383 (ACTIVE) - Summary

Relates to the cost effectiveness of consultant contracts by state agencies; defines "consultant services".

S383 (ACTIVE) - Sponsor Memo

BILL NUMBER: S383
TITLE OF BILL :
An act to amend the state finance law, in relation to the cost
effectiveness of consultant contracts by state agencies
PURPOSE OR GENERAL IDEA OF BILL :
Sets forth conditions when an agency shall enter into a contract for
consultant services. Requires agencies to conduct a cost comparison
prior to entering into a contract for consultant services to determine
if there is a less expensive alternative.
SUMMARY PROVISIONS :
Amends the state finance law by amending section 163 to add a new
subdivision 16, setting forth conditions that must be met when an
agency shall enter into a contract for consulting services of more
than $250,000, The agency shall compare costs to determine whether the
work can be performed at lower cost by utilizing state employees
rather than consultants. Certain exceptions are specified when this
cost comparison is not required. The agency must retain documentation
of the cost comparison as a public record.
JUSTIFICATION :

The purpose of this bill is to require state agencies to do cost
comparisons before entering into contracts for consultant services.
Any time the taxpayers' money is used to fund a contract for services
there is a need to insure that this expenditure is necessary and
prudent, The State of New York spends over $2 Billion per year on
consultants, In many cases these consultants perform work that could
be done by professional state employees and the cost of using
consultants is substantially higher.
In 1998 the use of engineering consultants by the State Department of
Transportation was studied by the State, Comptroller and OSC concluded
that the State could save millions of dollars by reducing the use of
consultants. The Comptroller recommended cost/benefit, analysis prior
to contracting with consultants. Other studies have confirmed this
finding, including an analysis by the State Assembly in 2009 that
estimated the state could save $250 million over three years by
reducing the use of information technology consultants. In 2010 The
state Senate Task Force on Government Efficiency estimated that the
Department of Transportation could save about $46 million per year by
implementing this policy. In 2009 the Federal Office of Management and
Budget issued a directive to Federal government agencies that calls
for them to perform a cost benefit analysis before entering into
contracts and to initiate pilot projects for in-sourcing work in cases
where the cost analysis supports the conclusion that the work can be
performed by government employers at lower cost that by using
contractors. OMB estimates that this and other contracting reforms can
save the Federal government $40 Billion.
LEGISLATIVE HISTORY :
A9698 of 2014: referred to Government Operations
2015-2016: referred to Senate Rules
FISCAL IMPLICATIONS :
None.
EFFECTIVE DATE :
This act shall take effect on the ninetieth day after it shall have
become a law, with provisions.

S T A T E O F N E W Y O R K
________________________________________________________________________
383
2017-2018 Regular Sessions
I N S E N A T E
(PREFILED)
January 4, 2017
___________
Introduced by Sen. ROBACH -- read twice and ordered printed, and when
printed to be committed to the Committee on Finance
AN ACT to amend the state finance law, in relation to the cost effec-
tiveness of consultant contracts by state agencies
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Legislative intent. The legislature hereby finds and
declares that it is in the public interest to enact a cost benefit
review process when a state agency enters into contracts for personal
services. New York State spends over $3.5 billion annually on personal
service contracts, over $840 million more than the State spent on these
contracts in SFY 2003-04, a 32% increase. Despite an Executive Order
that has implemented a post contract review process for some personal
service contracts the cost of those contracts continues to escalate
every year well above the inflation rate. In addition the State Finance
Law does not require state agencies to compare the cost or quality of
personal services to be provided by consultants with the cost or quality
of providing the same services by the state employees. Numerous audits
by the Office of State Comptroller as well as a KPMG study commissioned
by the department of transportation have found that consultants hired
under personal service contracts can cost between fifty percent and
seventy-five percent more than state employees that do the exact same
work including the cost of state employee benefits. The Contract Disclo-
sure Law (Chapter 10 of the laws of 2006) required consultants who
provide personal services to file forms for each contract that outline
how many consultants they hired, what titles they employed them in and
how much they paid them. A review of these forms show that the average
consultant makes about fifty percent more than state employees doing
comparable work. It is in the public interest for state agencies to
compare the cost of doing work by consultants with the cost of doing the
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

[ ] is old law to be omitted.
LBD03040-01-7
S. 383 2
same work with state employees as well as document whether or not that
such work can be done by state employees. If state government is to be
smarter, more efficient, and transparent then a cost benefit analysis
process that makes its findings public should be required by law.
§ 2. Section 163 of the state finance law is amended by adding a new
subdivision 16 to read as follows:
16. CONSULTANT SERVICES. A. BEFORE A STATE AGENCY ENTERS INTO A
CONTRACT FOR CONSULTANT SERVICES WHICH IS ANTICIPATED TO COST MORE THAN
SEVEN HUNDRED FIFTY THOUSAND DOLLARS IN A TWELVE MONTH PERIOD THE STATE
AGENCY SHALL CONDUCT A COST COMPARISON REVIEW TO DETERMINE WHETHER THE
SERVICES TO BE PROVIDED BY THE CONSULTANT CAN BE PERFORMED AT EQUAL OR
LOWER COST BY UTILIZING STATE EMPLOYEES, UNLESS THE CONTRACT MEETS ONE
OF THE EXCEPTIONS SET FORTH IN PARAGRAPH G OF THIS SUBDIVISION. AS USED
IN THIS SECTION, THE TERM "CONSULTANT SERVICES" SHALL MEAN ANY CONTRACT
ENTERED INTO BY A STATE AGENCY FOR ANALYSIS, EVALUATION, RESEARCH,
TRAINING, DATA PROCESSING, COMPUTER PROGRAMMING, THE DESIGN, DEVELOPMENT
AND IMPLEMENTATION OF TECHNOLOGY, COMMUNICATIONS OR TELECOMMUNICATIONS
SYSTEMS OR THE INFRASTRUCTURE PERTAINING THERETO, INCLUDING HARDWARE AND
SOFTWARE, ENGINEERING INCLUDING INSPECTION AND PROFESSIONAL DESIGN
SERVICES, HEALTH SERVICES, MENTAL HEALTH SERVICES, ACCOUNTING, AUDITING,
OR SIMILAR SERVICES AND SUCH SERVICES THAT ARE SUBSTANTIALLY SIMILAR TO
AND IN LIEU OF SERVICES PROVIDED, IN WHOLE OR IN PART, BY STATE EMPLOY-
EES, BUT SHALL NOT INCLUDE LEGAL SERVICES OR SERVICES IN CONNECTION WITH
LITIGATION INCLUDING EXPERT WITNESSES AND SHALL NOT INCLUDE CONTRACTS
FOR CONSTRUCTION OF PUBLIC WORKS. FOR PURPOSES OF THIS SUBDIVISION, THE
COSTS OF PERFORMING THE SERVICES BY STATE EMPLOYEES SHALL INCLUDE ANY
SALARY, PENSION COSTS, ALL OTHER BENEFIT COSTS, COSTS THAT ARE REQUIRED
FOR EQUIPMENT, FACILITIES AND ALL OTHER OVERHEAD. THE COSTS OF CONSULT-
ANT SERVICES SHALL INCLUDE THE TOTAL COST OF THE CONTRACT INCLUDING
COSTS THAT ARE REQUIRED FOR EQUIPMENT, FACILITIES AND ALL OTHER OVERHEAD
AND ANY CONTINUING STATE COSTS DIRECTLY ASSOCIATED WITH A CONTRACTOR
PROVIDING A CONTRACTED FUNCTION INCLUDING, BUT NOT LIMITED TO, THOSE
COSTS FOR INSPECTION, SUPERVISION, MONITORING OF THE CONTRACTOR'S WORK
AND ANY PRO RATA SHARE OF EXISTING COSTS OR EXPENSES, INCLUDING ADMINIS-
TRATIVE SALARIES AND BENEFITS, RENT, EQUIPMENT COSTS, UTILITIES AND
MATERIALS. THE COST COMPARISON SHALL BE EXPRESSED WHERE FEASIBLE AS AN
HOURLY RATE, OR WHERE SUCH A CALCULATION IS NOT FEASIBLE, AS A TOTAL
ESTIMATED COST FOR THE ANTICIPATED TERM OF THE CONTRACT.
B. PRIOR TO ENTERING ANY CONSULTATION SERVICES CONTRACT FOR THE PRIVA-
TIZATION OF A STATE SERVICE THAT IS NOT CURRENTLY PRIVATIZED, THE STATE
AGENCY SHALL DEVELOP A COST COMPARISON REVIEW IN ACCORDANCE WITH THE
PROVISIONS OF PARAGRAPH A OF THIS SUBDIVISION.
C. (I) IF SUCH COST COMPARISON REVIEW IDENTIFIES A COST SAVINGS TO THE
STATE OF TEN PERCENT OR MORE, AND SUCH CONSULTANT SERVICES CONTRACT WILL
NOT DIMINISH THE QUALITY OF SUCH SERVICE, THE STATE AGENCY SHALL DEVELOP
A BUSINESS PLAN, IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH D OF
THIS SUBDIVISION, IN ORDER TO EVALUATE THE FEASIBILITY OF ENTERING ANY
SUCH CONTRACT AND TO IDENTIFY THE POTENTIAL RESULTS, EFFECTIVENESS AND
EFFICIENCY OF SUCH CONTRACT.
(II) IF SUCH COST COMPARISON REVIEW IDENTIFIES A COST SAVINGS OF LESS
THAN TEN PERCENT TO THE STATE AND SUCH CONSULTANT SERVICES CONTRACT WILL
NOT DIMINISH THE QUALITY OF SUCH SERVICE, THE STATE AGENCY MAY DEVELOP A
BUSINESS PLAN, IN ORDER TO EVALUATE THE FEASIBILITY OF ENTERING ANY SUCH
CONTRACT AND TO IDENTIFY THE POTENTIAL RESULTS, EFFECTIVENESS AND EFFI-
CIENCY OF SUCH CONTRACT, PROVIDED THERE IS A SIGNIFICANT PUBLIC POLICY
REASON TO ENTER INTO SUCH CONSULTANT SERVICES CONTRACT.
S. 383 3
(III) IF ANY SUCH PROPOSED CONSULTANT SERVICES CONTRACT WOULD RESULT
IN THE LAYOFF, TRANSFER OR REASSIGNMENT OF FIFTY OR MORE STATE AGENCY
EMPLOYEES, AFTER CONSULTING WITH THE POTENTIALLY AFFECTED BARGAINING
UNITS, IF ANY, THE STATE AGENCY SHALL NOTIFY THE STATE EMPLOYEES OF SUCH
BARGAINING UNIT, AFTER SUCH COST COMPARISON REVIEW IS COMPLETED. SUCH
STATE AGENCY SHALL PROVIDE AN OPPORTUNITY FOR SAID EMPLOYEES TO REDUCE
THE COSTS OF CONDUCTING THE OPERATIONS TO BE PRIVATIZED AND PROVIDE
REASONABLE RESOURCES FOR THE PURPOSE OF ENCOURAGING AND ASSISTING SUCH
STATE EMPLOYEES TO ORGANIZE AND SUBMIT A BID TO PROVIDE THE SERVICES
THAT ARE THE SUBJECT OF THE POTENTIAL CONSULTANT SERVICES CONTACT.
D. ANY BUSINESS PLAN DEVELOPED BY A STATE AGENCY FOR THE PURPOSE OF
COMPLYING WITH PARAGRAPH C OF THIS SUBDIVISION SHALL INCLUDE: (I) THE
COST COMPARISON REVIEW AS DESCRIBED IN PARAGRAPH B OF THIS SUBDIVISION,
(II) A DETAILED DESCRIPTION OF THE SERVICE OR ACTIVITY THAT IS THE
SUBJECT OF SUCH BUSINESS PLAN, (III) A DESCRIPTION AND ANALYSIS OF THE
STATE AGENCY'S CURRENT PERFORMANCE OF SUCH SERVICE OR ACTIVITY, (IV) THE
GOALS TO BE ACHIEVED THROUGH THE PROPOSED CONSULTANT SERVICES CONTRACT
AND THE RATIONALE FOR SUCH GOALS, (V) A DESCRIPTION OF AVAILABLE OPTIONS
FOR ACHIEVING SUCH GOALS, (VI) AN ANALYSIS OF THE ADVANTAGES AND DISAD-
VANTAGES OF EACH OPTION, INCLUDING, AT A MINIMUM, POTENTIAL PERFORMANCE
IMPROVEMENTS AND RISKS ATTENDANT TO TERMINATION OF THE CONTRACT OR
RESCISSION OF SUCH CONTRACT, (VII) A DESCRIPTION OF THE CURRENT MARKET
FOR THE SERVICES OR ACTIVITIES THAT ARE THE SUBJECT OF SUCH BUSINESS
PLAN, (VIII) AN ANALYSIS OF THE QUALITY OF SERVICES AS GAUGED BY STAND-
ARDIZED MEASURES AND KEY PERFORMANCE REQUIREMENTS INCLUDING COMPEN-
SATION, TURNOVER, AND STAFFING RATIOS, (IX) A DESCRIPTION OF THE SPECIF-
IC RESULTS BASED PERFORMANCE STANDARDS THAT SHALL, AT A MINIMUM BE MET,
TO ENSURE ADEQUATE PERFORMANCE BY ANY PARTY PERFORMING SUCH SERVICE OR
ACTIVITY, (X) THE PROJECTED TIME FRAME FOR KEY EVENTS FROM THE BEGINNING
OF THE PROCUREMENT PROCESS THROUGH THE EXPIRATION OF A CONTRACT, IF
APPLICABLE, (XI) A SPECIFIC AND FEASIBLE CONTINGENCY PLAN THAT ADDRESSES
CONTRACTOR NONPERFORMANCE AND A DESCRIPTION OF THE TASKS INVOLVED IN AND
COSTS REQUIRED FOR IMPLEMENTATION OF SUCH PLAN, AND (XII) A TRANSITION
PLAN, IF APPROPRIATE, FOR ADDRESSING CHANGES IN THE NUMBER OF AGENCY
PERSONNEL, AFFECTED BUSINESS PROCESSES, EMPLOYEE TRANSITION ISSUES, AND
COMMUNICATIONS WITH AFFECTED STAKEHOLDERS, SUCH AS AGENCY CLIENTS AND
MEMBERS OF THE PUBLIC, IF APPLICABLE. SUCH TRANSITION PLAN SHALL CONTAIN
A REEMPLOYMENT AND RETRAINING ASSISTANCE PLAN FOR EMPLOYEES WHO ARE NOT
RETAINED BY THE STATE OR EMPLOYED BY THE CONTRACTOR. IF ANY PART OF SUCH
BUSINESS PLAN IS BASED UPON EVIDENCE THAT THE STATE AGENCY IS NOT SUFFI-
CIENTLY STAFFED TO PROVIDE THE SERVICES REQUIRED BY THE CONSULTANT
SERVICES CONTRACT, THE STATE AGENCY SHALL ALSO INCLUDE WITHIN SUCH BUSI-
NESS PLAN A RECOMMENDATION FOR REMEDIATION OF THE UNDERSTAFFING TO ALLOW
SUCH SERVICES TO BE PROVIDED DIRECTLY BY THE STATE AGENCY IN THE FUTURE.
E. UPON THE COMPLETION OF SUCH BUSINESS PLAN, THE STATE AGENCY SHALL
SUBMIT THE BUSINESS PLAN TO THE STATE COMPTROLLER.
F. (I) NOT LATER THAN SIXTY DAYS AFTER RECEIPT OF ANY BUSINESS PLAN,
THE STATE COMPTROLLER SHALL TRANSMIT A REPORT DETAILING ITS REVIEW,
EVALUATION AND DISPOSITION REGARDING SUCH BUSINESS PLAN TO THE STATE
AGENCY THAT SUBMITTED SUCH COST COMPARISON REVIEW. SUCH SIXTY-DAY PERIOD
MAY BE EXTENDED FOR AN ADDITIONAL THIRTY DAYS UPON A SHOWING OF GOOD
CAUSE.
(II) THE STATE COMPTROLLER'S REPORT SHALL INCLUDE THE BUSINESS PLAN
PREPARED BY THE STATE AGENCY, THE REASONS FOR APPROVAL OR DISAPPROVAL,
ANY RECOMMENDATIONS OR OTHER INFORMATION TO ASSIST THE STATE AGENCY IN
S. 383 4
DETERMINING IF ADDITIONAL STEPS ARE NECESSARY TO MOVE FORWARD WITH A
CONSULTANT SERVICES CONTRACT.
(III) IF THE STATE COMPTROLLER DOES NOT ACT ON A BUSINESS PLAN SUBMIT-
TED BY A STATE AGENCY WITHIN NINETY DAYS OF RECEIPT OF SUCH BUSINESS
PLAN, SUCH BUSINESS PLAN SHALL BE DEEMED APPROVED.
G. A COST COMPARISON SHALL NOT BE REQUIRED IF THE CONTRACTING AGENCY
DEMONSTRATES:
(I) THE SERVICES ARE INCIDENTAL TO THE PURCHASE OF REAL OR PERSONAL
PROPERTY; OR
(II) THE CONTRACT IS NECESSARY IN ORDER TO AVOID A CONFLICT OF INTER-
EST ON THE PART OF THE AGENCY OR ITS EMPLOYEES; OR
(III) THE SERVICES ARE OF SUCH A HIGHLY SPECIALIZED NATURE THAT IT IS
NOT FEASIBLE TO UTILIZE STATE EMPLOYEES TO PERFORM THEM OR REQUIRE
SPECIAL EQUIPMENT THAT IS NOT FEASIBLE FOR THE STATE TO PURCHASE OR
LEASE; OR
(IV) THE SERVICES ARE OF SUCH AN URGENT NATURE THAT IT IS NOT FEASIBLE
TO UTILIZE STATE EMPLOYEES; OR
(V) THE SERVICES ARE ANTICIPATED TO BE SHORT TERM AND ARE NOT LIKELY
TO BE EXTENDED OR REPEATED AFTER THE CONTRACT IS COMPLETED; OR
(VI) A QUANTIFIABLE IMPROVEMENT IN SERVICES THAT CANNOT BE REASONABLY
DUPLICATED.
H. NOTHING IN THIS SECTION SHALL BE DEEMED TO AUTHORIZE A STATE AGENCY
TO ENTER INTO A CONTRACT WHICH IS OTHERWISE PROHIBITED BY LAW.
I. ALL DOCUMENTS RELATED TO THE COST COMPARISON AND BUSINESS PLAN
REQUIRED BY THIS SUBDIVISION AND THE DETERMINATIONS MADE PURSUANT TO
PARAGRAPH G OF THIS SUBDIVISION SHALL BE PUBLIC RECORDS SUBJECT TO
DISCLOSURE PURSUANT TO ARTICLE SIX OF THE PUBLIC OFFICERS LAW.
§ 3. On or before December 31, 2020 the state comptroller shall
prepare a report, to be delivered to the governor, the temporary presi-
dent of the senate and the speaker of the assembly. Such report shall
include, but need not be limited to, an analysis of the effectiveness of
the cost comparison review program and an analysis of the cost savings
associated with performing such cost comparison.
§ 4. This act shall take effect on the ninetieth day after it shall
have become a law and shall apply to all contracts solicited or entered
into by state agencies after the effective date of this act; provided,
however, the amendments to section 163 of the state finance law made by
section two of this act shall not affect the repeal of such section and
shall be deemed repealed therewith.

Comments

Open Legislation comments facilitate discussion of New York State legislation. All comments are subject to moderation. Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity or hate speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Comment moderation is generally performed Monday through Friday.

By contributing or voting you agree to the Terms of Participation and verify you are over 13.